Which of the Following Will Reduce the Velocity of Circulation

question 77

Multiple Choice

Which of the following will reduce the velocity of circulation of the money stock?

• A)The inflation rate increases.
• B)The interest rate falls.
• C)Credit cards are used more frequently.
• D)More employees are paid once a week instead of once a month.

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Definitions:

Social Security

A government program that provides financial assistance to people with an inadequate or no income, primarily the elderly, disabled, and unemployed.

Long-term Solvency

The ability of an entity, typically a government or business, to meet its long-term financial liabilities and obligations.

Low Birthrate

A situation where a country or region experiences a lower number of births, often leading to concerns about population decline and demographic aging.

Aging Population

A demographic trend where the median age in a population increases over time due to increasing life expectancy and/or declining birth rates.